Harper: ...(M)ake no mistake, that as a Conservative government, we think it is very important that the middle class be part of a stimulus program. Yes, it is very important to help the vulnerable, struggling sectors and help people who are losing their jobs, but you can’t sustain economic activity without having stimulus for the middle class as well. That’s very important. Since the middle class is paying most of the freight, the middle class has to share in the stimulus program and we will be making sure that is the case.So what's wrong with that passage? From my standpoint, there are two glaring signs that Harper has something other than the best interests of Canada's economy at heart.
First, Harper looks to be confirming the usual Con view that multi-party cooperation means other parties going along with their plans. Rather than presenting a message that he's looking to find common ground that's acceptable to two or more parties, Harper's frame of reference is "as a Conservative government" - with the implication being that he's more concerned with catering to his base by doing what Con governments normally do than he is with putting together a package which will be acceptable to anybody but his own party.
Which is of course exactly what got Harper into his current predicament in the first place, as he wrongly concluded that he was entitled to push typical Conservative attacks on pay equity and union rights into last fall's fiscal update without considering whether anybody else supported them. But evidently any lesson which Harper could have learned from that experience has been long forgotten or put aside - a fact which shouldn't be lost on the Libs in particular in assessing whether the Cons ought to be left with the levers of power.
Mind you, there's a strong case to be made that partisanship of any kind shouldn't be the main concern for a budget which is supposed to set out Harper's plan to deal with a recession over a period of several years. But the question of what policies are best designed to put Canada's economy back on track is a different one from what policies are most popular with the middle class or those who are "paying most of the freight".
Now, an actual leader would figure to be willing to make the case as to what policies will be most effective on their own to relieve the effects of the recession, and put some political capital into getting those who have less need for help to buy in based on the national interest. But Harper's answer states fairly clearly that he's committed to pandering to the latter groups by saying that any package should be conditional on their receiving some handouts as well - rather than to putting together the most effective set of policies possible.
Not surprisingly, Harper has already been rightly criticized by a number of economists for those types of plans which simply don't make sense from an economic perspective:
(S)ome economic tools under consideration — including temporary tax cuts and other incentives to spend — could backfire, say a group of six high-profile economists. Such measures often don't result in extra spending by tight-fisted consumers during tough times. The budget should instead aim to fix employment insurance and other programs that protect the most vulnerable in a recession, they said.But while the economists quoted obviously can't do more than to point out the economic ineffectiveness of Harper's plans, the Libs hold the power to make sure that any stimulus is actually targeted toward ensuring Canada's prosperity rather than serving Harper's political goals. And hopefully they'll recognize that both they and the country at large will be best off if they take that opportunity.
"I'm dead against a temporary GST cut," said Warren Jestin, chief economist at Bank of Nova Scotia, one of the members of the economists' group, which met with The Globe and Mail's editorial board Friday before Mr. Harper emerged from the premiers meeting...
Don Drummond, chief economist at Toronto-Dominion Bank and a former Finance Department official, said there is still discussion about temporary cuts to the goods and services tax and other federal levies. Another idea being bandied about in Ottawa, Mr. Drummond said, is for vouchers in the range of $500 to $1,000 to induce consumers to make purchases at Canadian retailers within a given time frame.
He dismissed the notion, which he described as being akin to retailer gift cards, as ridiculous. "There's a compact between citizens under which citizens allow governments to take their money to respend on the public good," he said. "This is not a public good."
On other issues, the group of economists said:...
* Support for low-income Canadians may have a greater economic impact than measures for the whole population, because poor people spend more of their income.